Firm delays possession of home, fined

PUNE: The state consumer commission has ordered a construction firm in the city to pay Rs 30,000 to a couple for delaying the handing over of possession of a row house in Baner by eight years. Justice A P Bhangale and expert member Narendra Kawde, comprising the bench, also directed Rohan Developers at Bhandarkar Road to hand over possession of the row house after accepting the balance of over Rs 36.76 lakh from the couple within 90 days, with 9% per annum interest since January 5, 2008. Chandrakant Gandhi and his wife Jyoti, from Ichalkaranji in Kolhapur district, had jointly executed an agreement with Rohan Developers on December 27, 2006, for the purchase of the row house under the 'Rohan Seher' scheme for Rs 61.26 lakh. The unit was to be delivered by August 31, 2008. The Gandhis paid Rs 24.5 lakh to the firm till January 4, 2008, but found that the construction as certified by the architect was not commensurate with the schedule in the agreement. The couple paid two cheques totally worth Rs 9.18 lakh in January 2008, but the firm did not en-cash it after accepting them. Instead, it issued a demand notice claiming the couple defaulted on payment and sought the same with 15% p a interest. On November 5, 2008, the firm issued a notice informing the Gandhis that it was terminating the agreement. The couple moved the state consumer commission against this, alleging deficiency in service and unfair trade practice on the part of the firm. The firm argued that the agreement to sale was not registered and the complainants were to be blamed for not turning up to register the same. It added that the complainants defaulted on payment. The firm argued that the complaint filed on June 21, 2013, was barred by the limitation law considering the termination notice was issued on November 5, 2008. The bench, however, dismissed the limitation argument, citing a 1999 Supreme Court ruling which held that prayer for possession is a continuous cause of action and, hence, can't be held as time barred.

The bench held that the firm was liable for deficiency in service for failing to deliver possession of the housing unit as per schedule and for failing to register the agreement even after receiving a substantial of the total consideration from the complainants. Provisions under the Maharashtra Ownership Flats Act (MOFA) make it mandatory for the builder to register agreement. The firm had argued that the row house was ready for possession but the complainants must pay interest at 15% p.a. The complainants countered this by stating they were willing to pay the balance consideration but, the interest demanded was exorbitant. The bench upheld the latter's contention by observing that the MOFA provided for only 9% p.a. interest on default and the 15% p.a. mentioned in the agreement ought to be ignored.